It’s the 2% that bothers me

Dear John: Why do you just assume that the US economy must grow at more than 2.5 percent per year? Why must it grow at all? R.B.

Dear R.B.: Oh, you are mistaken. I don’t assume that the US economy is going to grow at 2.5 percent. And I don’t assume that the economy “must” — your word — grow at all.

The US economy has been growing in the mid2percent range since the Great Recession. This is inadequate growth by historical standards. And that growth comes only after a lot of dangerous maneuvers in Washington.

I’ve said this before — and before everyone else started saying it — but my real fear is that 2 percent annual growth is the best our economy is capable of.

I also fear that we will become like Greece: lots of young people without careers and with little to do except stay in nightclubs until the sun rises.

Dear John: Why do baseball players, especially the young

ones, grow those hideous beards? They look like old hillbillies and unkempt homeless men.

It’s bad enough they don’t respect the game by not hustling and wearing their hats off to the side, like the hiphop street mentality. But those beards, ugh!

It’s a shame these immature players just don’t get it. J.S.

Dear J.S.: This doesn’t seem to be a financial question but I’ll make it into one. They wear beards because this is America, where we are free to look and behave any way we want, right up to the point that the cop car pulls you over or the commissioner of your league urges you to clean up your act.

Here’s the financial part. Professional athletes make enough money to be able to do whatever they want.

What I wonder is, why do baseball players want long beards when they are playing in hot weather?

Dear John: Switzerland has pushed rates further below zero as the Federal Reserve has maintained them near zero for what seems like forever in the name of staving off deflation. Yet it is these rates that have led me to curtail personal spending, the very behavior that central banks are trying to prevent.

The necessity of taking on more risk for any kind of return has led me to up the amount I have to amass in order to relax and start spending again. Couple this with people who have no assets and who have been traumatized by the economy since 2008, and I see no path away from the deflationary trap similar to that which has engulfed Japan for going on 30 years.

Is there a rational way forward other than more of the same? I’m petrified about the future. P.M.

Dear P.M.: Swiss Re recently reported that the Fed’s efforts to stimulate the economy since 2008 have cost savers like you $1 trillion in interest income. This is essentially a secret tax that savers have paid to keep the US economy afloat and bail out various companies.

On the flip side, homebuyers have saved by getting cheaper mortgages. And many, many homeowners have been able to refinance at lower rates. Plus, what the Fed has done has been very good for the stock market, which is oblivious to the economy’s shortcomings right now and is simply thrilled that there’s no place else for investors to put their money.

So has this been an even trade — the benefits offsetting the negatives? Let someone else answer that.

But here’s the way I see it. If someone gets interest on a savings or moneymarket account, he or she can immediately take that extra money out and spend it. So the economy benefits.

Forget for now that a different stratum of society invests in stocks. But if someone has gains in a stockmarket account, it’s harder to cash in and use those gains for purchases. Plus, if the stock market keeps rising, there’s less incentive to cash in. Sure, a gain in stock prices makes people feel richer. It just doesn’t make them spend like they are richer.

Homeowners? You don’t have more liquidity — cash in your budget — if you just purchased a house and got a great rate. Chances are you used that lower rate to buy a bigger house.

So there are reasons the economy isn’t doing better. And even though the experts profess to be perplexed, there really are reasons consumers aren’t spending more. You are a prime example.

Should you be petrified? That won’t help. Should you worry? Go ahead, you have my permission.

Dear John: If the college tuition being paid by a recent letter writer hadn’t risen twice as fast as inflation, he would not have student loans. J.M.

Dear J.M.: If Columbus had been prone to seasickness, we probably wouldn’t be here today.

But Columbus sailed. And the price of a college education has — in fact — gone up much faster than regular inflation. That ship also has sailed.

So my letter writer has student loans and needs to deal with them.

And now I’ve dealt with your cryptic remark.